Satellite company will pay $20 million fine to Uncle Sam

The Customs Service has levied a $20 million fine on Space Systems/Loral following charges that the company allegedly provided missile guidance technology data to China.

The $20 million fine will be the largest paid by an American company under the Arms Export Control Act. Under the law, Customs and the State Department regulate the release of licensable technical data to foreign countries.

Under the terms of an agreement between the Palo Alto, Calif., satellite manufacturer and the government, Loral agreed to pay the fine without admitting or denying the charges.

Customs' Baltimore office began an investigation in 1996 after reports that Loral had released sensitive technical data to the Chinese, Customs officials said. Early that year, Loral had undertaken a review of a failed launch of one of its satellites in China.

According to Customs, Loral told State officials that it unintentionally had released the sensitive information to Chinese authorities.